Yes, micro-Farad

Hi Eman

I bought the original BMW AUX kit and installed it myself....no need to set up anything on the headunit.

No. It works like this on mine:
Before AUX kit installed - Mode key switch from Radio-CD-CDC (no "AUX")
After AUX kit installed - Mode key switch from Radio-CD-CDC-AUX.

This works in the same way regardless of whether your aux-source is actually pluged in and/or it's power is switched on / off. (I Believe the Headunit only detects if the there's an AUX Kit plugged in to the back of the headunit or not)

Good Luck

After reading this I realized I have the same problem. I am using the Belkin Ipod adapter that worked fine for about a month, then it would work sometimes for about 30 min then stop, now nothing happens. So I did what you suggest with just using the batty power from the Ipod, and it works fine. Now If I try and plug in the Belkin adapter to charge the Ipod the AUX switches to the radio. It would be great if someone knew the fix for this.

All,

A Ground-Loop Isolator may be required when the auxiliary device is charged/power from the vehicle's 12V battery source. This part can be found at Radio Shack (Cat.No. 270-054) and will eliminate unwanted noise caused by ground loops.

I installed the ground loop isolator since friday and the problem went away. Most particularly you will notice the fidelity improvement and no more hum. The "Aux" is now working properly even with a powered device such as XM Mifi, iPod, xM2Go, etc. plugged into 12v source.

Good Luck1

VS1